Salary includes basic, dearness allowance, dearness pay, arrears of salary (if not taxed earlier), salary in lieu of notice, fees, commission, bonus and annuity from employer and remuneration for extra work (fully taxable), Gratuity (exempt upto certain limit under section 10(10), leave encashment (exempt upto certain limit under section 10(10AA), Retrenchment compensation exempt upto a certain limit, Voluntary payment (fully taxable if payment is made with reference to service rendered). Salary to a foreign citizen (exempt in some cases), payment received at the time of voluntary retirement from a public sector company, any other cash payment of salary (fully taxable), city compensatory allowance, children’s education allowance, tiffin allowance, fixed medical allowance and servant allowance (fully taxable), house rent allowance (exempt upto certain limit under section 10(13A), entertainment allowance (subject to certain conditions), conveyance allowance or special allowance (exempt in some cases under section 10(14), foreign allowance (exempt in some cases under section 10(7), compensatory allowance under article 222(2) of the constitution (not taxable). Rent free houses (taxable in all cases). Concession in rent (taxable in all cases), Motor car (taxable in some cases), Gas, Electricity and Water supply (taxable in some cases), Free Education (taxable in some cases), Free Transport (taxable in some cases), Free domestic servant, (taxable in some cases), etc. It is the actual cost to employer for providing the facilities (perks) that shall be added to taxable income. Shares given by employer to his employees at a price below market rate, difference shall be taxable in the hands of employee. Salary to a partner shall not be treated under this head but as business income. On application u/s 89(1) or by employer suo motu, relief can be sought for arrears or advance of salary.